Scott Painter is an honorable rebel. That’s helped the 44-year-old raise $1.7 billion for 37 start-ups. It’s also helped him open the doors to business relationships with Mr. Painter’s “heroes” like Richard Branson, Elon Musk, and Michael Dell.

While Mr. Painter is a gifted story teller, the best one he told me is how he got elected president of his class at West Point.

He was two years older than his classmates when he arrived, and had done a tour of duty that yield him “a couple rows of ribbons, and an air assault and an airborne badge.”

And at his military prep school, he and his roommate had created a case study in the difference between violating a regulation — which would lead to punishment — and violating honor — e.g., lying — which would result in expulsion.

Thanks to a cable subscription to a TV in his room, he was able to violate a regulation while maintaining his honor.

As Mr. Painter recounted, “One of the rules at the prep school is you are not allowed to have TV in your room. I went ahead and had TV in the footlocker in my room, and my roommate and I would watch TV in the evenings.”

The thing that kept him from an honor violation was that he paid for his own cable TV subscription.

According to Mr. Painter,”We ended up piping in cable into the barracks, so we had cable TV in our room. The beautiful thing is I had a cable subscription; but when I got busted, they thought that we were just stealing cable from the common area.”

That story became “part of the teaching curriculum at West Point plebe summer for all of the plebes. It was being used as a way of explaining what is honor versus the rules. It turned out that that’s how everyone got to know who I was, because I was the cable kid.”

Mr. Painter was the first of 40 company nominees for president of the class. He volunteered to give the first campaign speech at Camp Buckner. As Mr. Mr. Painter said, “I grabbed the mic and said, ‘Look, I’ve never been in class committee, I’ve never been in student government, you all know me as the cable kid.’”

Then Mr. Painter said, “A roar goes out over the crowd, and I said, ‘Look, what every single guy and gal is going to tell you is that they were class president at their high school, and how great they were as captain of the football team, and how smart they are as a student, and that’s why they’re here.’”

Mr. Painter offered a different reason to elect him. As he recounted, ”But I’m the guy who’s going to get you a toga party in New York City as plebes.”

Mr. Painter said, “I was unanimously voted in and we did those things. Our plebe year, our parent-teacher week, we ended up taking, for the first time ever, the entire plebe class to New York City for a field trip on 20 buses with no chaperones.”

When it comes to honor, Mr. Painter does not think that Los Angeles has it. Or at least, he believes that its values are not conducive to a well-functioning Start-up Common.

The Silicon Valley Start-up Common is based on the idea of equity. Mr. Painter believes that it goes back to lawyers, such as Larry Sonsini, who “wrote the rulebook for how management, founders and investors balanced the equation of incentive and reward. That is one of the motivations that drives a lot of what happens in Silicon Valley. It really is a meritocracy based on this notion of equity becoming worth something.”

But Los Angeles does not believe in giving back, according to Mr. Painter.

As he said, “Part of the problem with Los Angeles is that the entertainment culture focuses on greed and individual success, not equity. It’s a cash-and-carry kind of world down here, where if you win, you get a big payday. The wealth that exists here, for the most part, isn’t wealth that comes from being an owner of a business; but rather, it comes predominantly from making a deal.”

When it comes to his ability to develop relationships with people such as Mr. Branson, Mr. Painter believes that much depends on honor. More specifically, Mr. Painter works hard to preserve his reputation as a person who takes investors’ money and gives them back a return on their investment.

His advice for young entrepreneurs is simple and uncommon: Learn how to understand and talk about financial statements. In particular, Mr. Painter argues that successful entrepreneurs must know the difference between an income statement, balance sheet, cash flow statement, and pro forma.

He also urges young people to know “four or five legal documents” such as ”certificates of incorporation, the investor rights agreement, the stock purchase agreement, and the protective provisions such as conversion ratios and the preferred return.”

Most importantly, in Mr. Painter’s view, is that people need to figure out whether they are true entrepreneurs. Mr. Painter believes that ”entrepreneurs have to be fatally optimistic. They have to ignore reality, quite often. Unless you are totally in debt and willing to double down based on your beliefs about what you want to get done, then you’re probably not an entrepreneur.”